Newsroom

June 8, 2011 – NAFCU President Fred Becker said he was "deeply disappointed" by today's Senate vote rejecting a delay of the Federal Reserve's debit interchange fee-cap rule and thanked Sens. John Tester, D-Mont., and Bob Corker, R-Tenn., for seeking the delay on behalf of credit unions.

"We greatly appreciate the efforts of Sens. Tester and Corker and the bipartisan group of senators who championed this amendment to protect credit unions and other small financial institutions, as well as consumers," said Becker.

The Tester-Corker amendment would have delayed implementation of the Fed rule – currently slated for July 21 – and required the Fed, NCUA, Office of the Comptroller of the Currency and FDIC to study the impact of an interchange fee cap on consumers and smaller financial institutions, such as credit unions, and determine any need to change the rule. Senators voted 54-45 in favor of the amendment, but the provision needed 60 affirmative votes to pass.

The Federal Reserve Board has proposed a 12-cent cap on debit interchange transaction fees, but that cap ostensibly doesn't apply to "exempt" institutions, those with less than $10 billion in assets.

Fed Chairman Ben Bernanke, FDIC Chairman Sheila Bair and several lawmakers have echoed concerns raised by NAFCU that the small-issuer exemption will not work in the marketplace, where institutions of all sizes are likely to eventually come under the fee cap for competitive reasons.

Becker said today's vote wasn't about helping big Wall Street banks. "It's about the small credit union on Main Street that has to compete against the world's largest megabanks. And it's about correcting a flawed piece of legislation that will ultimately enrich the nation's largest big-box retailers at the expense of consumers."

The Fed has said it will issue a final rule in time for a July 21 implementation. That rule will be released during an open meeting.